This was the view articulated in a recent edition of Republic Bank’s Economist newsletter, which was issued before Prime Minister Kamla Persad-Bissessar announced this year’s election date in the House of Representatives last Friday.
“Election related expenditure should also provide impetus for distribution, advertising and transport,” the bank observed. The bank made this observation after it noted there could be some benefits for the non-energy sector of the economy, during the three month general election campaign.
Indicating that the non-energy sector remains “fairly vibrant” because it is “fueled in part by construction sector growth, “the bank anticipated further growth in this part of the economy, “as Government seeks to complete several projects in the run-up to elections.”
Some of these projects, as identified by Prime Minister Kamla Persad-Bissessar, include the opening of the Couva Children’s Hospital and the start of construction on new hospitals in Arima and Point Fortin.
Speaking at a United National Congress (UNC) meeting in Couva on Monday, Persad-Bissessar boasted that Government created 57,000 new jobs over the last five years.
She also claimed that Shell, BP and Mitsubishi are bringing foreign direct investment (FDI) into the country. Last Friday in Parliament, Persad-Bissessar dismissed concerns that the election campaign would negatively impact on the presentation of the 2016 Budget, insisting, “there is more than adequate time to pass a budget if there is a general election in September.”
The Budget must be passed by the House and the Senate before October 1, the start of the new fiscal year. Last Friday Opposition Leader Dr Keith Rowley maintained his concerns about the elections overlapping with the preparation of the Budget. Rowley said, “This will give a new government three weeks to prepare a budget. The fiscal year starts on October 1. This is the height of irresponsibility on the part of the Prime Minister. The Prime Minister should have put the country first and not her interests first.”
The bank also indicated the manufacturing sector may see gains during this period from increased demand from the wider Caribbean as cheaper fuel and improving economic conditions in major source markets stoke regional tourist arrivals.
On the energy front, the bank said it envisaged relatively low oil revenues for the first half of this year, “given that prices are not expected to rise significantly during the period.
The bank recalled that in response to low global energy prices, Government revised the 2015 Budget, basing its revenue and expenditure on a crude oil price of US$45 per barrel and a natural gas price of US$2.25 per mmbtu. The 2015 Budget was originally pegged against oil and gas prices of US$80 per barrel and US$2.75 per mmbtu respectively.